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One Thing I’ve Learned About Cancellation Policies as an Airbnb Host

We have offered a private room in our house on Airbnb for 6 months now. You can read more about my experience here, but in this post I want to highlight one of my pain points when it came to hosting guests and that is the Airbnb cancellation policies. Airbnb outlines the cancellation policy options for hosts and it spans six different categories:

Flexible

Moderate

Strict

Super Strict 30 Days

Super Strict 60 Days

Long Term

Typical Airbnb hosts will only have the top three options: Flexible, Moderate and Strict. Since I wanted to attract as many guests as possible, I started with the flexible cancellation policy which basically offers a full refund if the guest cancels 24 hours before they arrive. Some guests certainly require such flexibility, but I have found that this option also attracts guests who aren’t committed to their plans knowing they can cancel the day prior.

Once I had my first booking cancel days before they were set to arrive I decided to immediately change my policy. In smaller cities like mine, I very rarely receive any bookings to stay during the week and last minute bookings are virtually non-existent due to low demand. This means weekends are extremely important, which means a maximum of 4 bookings per month. A cancelled guest can affect earnings significantly as I found out through my experience. I am happy to forego a guest due to my cancellation policy as a hotel is much better suited for this type of guest anyway.

Selecting Airbnb’s Moderate Cancellation Policy

I decided on the moderate cancellation policy since it truly is the happy medium between flexible and strict. Guests still can receive a 100% refund, but only if they cancel 5 days prior to arrival. This compares to the strict cancellation policy which provides a maximum of a 50% refund. If I know 5 days in advance that a guest has cancelled I can adjust my schedule for the weekend accordingly. Plus, there is a chance for someone else to book our Airbnb during those 5 days. This is the experience I would also find acceptable as an Airbnb guest since plans can change.

Conclusion

While what you choose as your cancellation policy may be different due to your market this is one thing I wish I would have thought more about when I created my listing. If you live in a big city and your Airbnb is going to be booked fairly often for short stays you may want to consider the flexible cancellation policy. For a vacation destination with longer stays you may find that moderate or strict policy would better suit your needs. Either way, this is one thing you should not overlook when you create your listing.